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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (6851)	11/18/2000 3:45:53 PM
From: RockyBalboa	Respond to of 19428

An End to Vote Drama Should Lift Stocks By Kenneth Barry NEW YORK (Reuters) - The climax to America's presidential election melodrama, which appears to be near, should banish stock market blues and lead to a rally. Voters may finally be close to learning who the next president will be, more than a week after a history-making, razor-close election pitting Texas Gov. George W. Bush (news - web sites) against Vice President Al Gore (news - web sites). The outcome hangs on who won in Florida, capturing the state's 25 Electoral College votes. Bush has a tiny lead in the latest vote count. The lingering uncertainty has contributed to the weakness on Wall Street. But the experts say that after a rally, the market will get a reality check about slower U.S. economic growth and lower corporate earnings prospects. They also believe the technology sector, which has taken investors on the scariest roller-coaster ride, offers excellent long-term value for those with strong stomachs. Tantalizing End The final count of Florida's absentee ballots is tantalizingly close, and once the myriad legal challenges are over, the way will be clear for an electoral relief rally, market strategists say. An extra boost could come from short-covering by speculators who have been betting on lower stock prices and could get squeezed. As the nation fretted about the closest election in 120 years, stock sectors such as drugs and oil rose and fell, depending on perceptions about who had won the White House. But settling the standoff will change that. ``Now if you buy a stock, you will know what you are getting,'' says Robert Brusca, chief economist for consulting firm Ecobest. Let Down By The Fed The post-post-election lift for stocks may be short-lived. The past week also proved the Federal Reserve isn't ready to ride to the market's rescue with an easier credit policy. Wall Street had wished for the inflation-fighting central bank to switch to a neutral stance from its current tightening mode, but that didn't happen at the Nov. 15 meeting of the Federal Open Market Committee, which sets policy on interest rates. The FOMC kept rates steady but made clear it wasn't ready to stop worrying about inflation, even after raising interest rates six times since June 1999. In surprisingly aggressive language, Fed Chairman Alan Greenspan (news - web sites) and the others warned that a rise in energy prices and a tight labor market could rekindle inflation -- a disappointment for market bulls who say inflation is a nonissue. The lesson was that the Fed doesn't want to change anything and is content to let growth slow, says Paul Kasriel, senior vice president at Northern Trust Co. in Chicago. ``I don't think the Fed will be preemptive in easing. There would have to be very convincing signs that recession was highly likely before they ease,'' he said. Other analysts say the Fed could switch to a neutral stance at the end of January if the threat of energy price inflation subsides. WATERED DOWN EARNINGS FORECASTS? In the meantime, the economy faces a delicate transition to lower growth that will create volatility for stocks as companies scale back growth forecasts and splash cold water on their hot earnings projections. A more defensive posture may be called for. ``The investor should be looking at the debris and the rubble created by the correction so far and will probably find technology company stocks that have adjusted prices to new levels of expectations,'' says Ned Riley, chief investment strategist for State Street Global Advisors He says that despite recent warnings about falling demand, desktop computers for offices and homes will always be needed and he remains positive about PC manufacturers as well as software and semiconductor stocks. Technology stocks' earnings are projected to grow by 18 percent a year for the next three to five years, down sharply from the 30 percent growth of the past five years but still twice the level of stocks in the Standard and Poor's 500 index, notes Allen Sinai, chief economist and strategist at Decision Economics Inc. ``A lot of tech stocks are at bargain levels now, but investors have to be prepared for volatility and the potential for further declines,'' he says. Ecobest's Brusca says investors should overcome their fears about tech stocks and dive in despite the recent pullback. ``There is going to be a lot more investment in technology. No one wants to go first because they're afraid there still are sharks in the water.'' The technology-packed Nasdaq Composite Index (^IXIC - news) ended down 4.67 points, or 0.15 percent, at 3,027.21 on Friday. The index had earlier fallen below the key 3,000 level, which it had breached for the first time in more than a year on Monday. The Dow Jones industrial average (^DJI - news) was down 26.16 points, or 0.25 percent, at 10,629.87, weighted down by BellSouth rival SBC Communications (NYSE:SBC - news). The broader Standard & Poor's 500 Index (^SPX - news) fell 4.61 points, or 0.34 percent, to 1,367.71. (The Stocks column runs weekly. Pierre Belec was away this week. Any questions or comments on this column can be sent to ken.barry (at) reuters.com) dailynews.yahoo.com